3. Hon JIM ANDERTON (Leader—Progressive) Link to this
to the Prime Minister
Is the gap between our wages and wages in Australia and other parts of the world getting wider; if so, why is this occurring?
Hon GERRY BROWNLEE (Acting Prime Minister) Link to this
The Government does not monitor wage movements around the world. However, we do monitor incomes using GDP per capita, and on that basis it is very clear that New Zealand has fallen behind many other developed countries. The last year for which we have consistent data is 2008, when New Zealand slipped from 20th to 22nd on the OECD ladder. This decline was in no small part due to mismanagement by the previous Government.
Will the increase in GST in New Zealand, which will raise it to 50 percent higher than it is in Australia, make the wage gap with Australia narrower or wider?
Hon GERRY BROWNLEE Link to this
The after-tax wage gap between Australia and New Zealand after 1 October will be narrower.
Hon GERRY BROWNLEE Link to this
That question will best be answered in the light of history. It is the light of history that is so condemning of the economic policies that the member’s Government ran for 9 years.
Mr SPEAKERYes, it is. That is about the shortest question that I have ever asked in my whole history in this House—[ Interruption]
I think it therefore deserves to be given an answer, rather than to have a discussion about history.
When a member asks a question about the future and whether something will happen in the future, there is no precise answer to that. The member is experienced enough to know that.
Was the net tax cut last year zero for all employed New Zealanders who earn under the average wage—that is, 64 percent of all employed New Zealanders—and is it virtually zero for everyone in the same group this year; if so, how does that help to close the income gap for the majority of wage earners in New Zealand compared with their Australian cousins?
Hon GERRY BROWNLEE Link to this
The answer, I think, to the middle part of his question is no. The 1 October tax change will mean that 75 percent of New Zealand’s workforce will pay no more than 17.5c in the dollar. They will be better off.